Compliance Bricks and Mortar – March 1 Edition

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March comes in like a lion and out like a lamb. The same may be true of the SEC when it comes to the 2008 financial crisis and the SEC. This week’s  Supreme Court decision in Gabelli v. SEC,  means that the SEC has only 5 years after the date of the fraud to bring an enforcement action.

The 2008 financial crisis began in March 2008, when the Federal Reserve announced an unprecedented action to lend $30 billion to JPMorgan Chase to buy Bear Stearns. All the fraud that lead up to the collapse of Bear Stearns will be outside of the enforcement of the SEC in a few days.

The SEC is going to be left with post-collapse valuation failures as firms failed to write down their assets or fraudulently told their investors that everything was going to be okay, when the walls were collapsing around them.

Here are some of the other compliance related stories that recently caught my attention.

People Need to Stop Selling Earnings Info to Undercover FBI Agents
by Bruce Carton in Compliance Week

Unfortunately, the saying “those who don’t know history are destined to repeat it” has once again turned out to be quite accurate. Prosecutors alleged this week that in June 2011, several months after Sebbag was sentenced, a Long Island financial advisor named Damian Perna embarked on a similar scheme in which he obtained draft earnings reports for several public companies through a contact at an investor relations firm. Bloomberg reports that “after getting an advance copy of one earnings report, Perna sold it for $7,000 to a Federal Bureau of Investigation agent working under cover, prosecutors said.”

Yunnan official’s airport tantrum goes viralBy Benjamin Kessler in the FCPA Blog

The Chinese internet’s latest exemplar of official arrogance run amok is Yan Linkun, a committee member of Shizong County (Qujing City, Yunnan Province) Chinese People’s Political Consultative Conference (CPPCC).

Best Practices for Internal Investigation Interviews by Michael Volkov in the Corruption, Crime, & Compliance Blog

An internal investigation is only as good as the information elicited during interviews. I do not mean to belittle the importance of collecting and reviewing documents. But documents provide the framework, the context and the outline of a series of events – the investigation story. Also, documents are invaluable tools for investigators when conducting interviews. They constrain the witness’ ability to fabricate or mislead. In many cases, they provide the boundaries for truth.

FTC Releases Top 10 Complaint Categories for 2012

“Identity theft is once more the top complaint received by the Federal Trade Commission, which has released its 2012 annual report of complaints. 2012 marks the first year in which the FTC received more than 2 million complaints overall, and 369,132, or 18 percent, were related to identity theft. Of those, more than 43 percent related to tax- or wage-related fraud. The report gives national data, as well as a state-by-state accounting of top complaint categories and a listing of the metropolitan areas that generated the most complaints. This includes the top 50 metropolitan areas for both fraud complaints and identity theft complaints.”

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